FLUG REVUE June 2004: ATR looks ahead

VIP-Interview

Jean-Michel Léonard, Chief Executive Officer, ATR

Do turboprop-aircraft have a future in air traffic? We spoke with Jean-Michel Léonard, Chief Executive Officer of ATR (Avions de Transport Regional) on future trends and the current situation of regional aviation.

FLUG REVUE: How would you define ATR's position in the current marketplace and what is your strategy to cope with the difficult circumstances at the moment?

Léonard: I think the position of ATR is now clearer than it used to be. We now position ourselves as the specialist for short distance regional aviation. The respective roles of the jet and turboprop have now become quite clear. Jets have their definite and important role, everything related to long distance regional aviation. The turboprop now is dedicated to the short distance. This is particularly true in Europe. It is a bit less clear in North America.

FLUG REVUE: For this year you predict orders for 20 new ATR aircraft. Compared to higher numbers of earlier years, this is rather slim. Do you predict the sales to rise again in the coming years?

Léonard: I think if you look at all the market forecast made by different consultants, manufacturers, engine manufacturers and so on, there is sort a sort of consensus saying that in the future there is a market of around 50 airplanes per year. Some say 60, some 40, but it is in this range. More or less we see half and half (between us and Bombardier). On average, we expect our market to be around 20 in a normal year. And 2003 was definitely not a normal year in terms of economics.

FLUG REVUE: What would be the most promising regions in terms of future sales?

Léonard: Our most active regions changed since the beginning of the program. North America was a very active market for us, this is not anymore the case. Maybe it will come back but not for the time being. Our two most active region are Europe and Asia at large including the Pacific area.

FLUG REVUE: If the turboprop market should remain very slow, would you consider to give-up production of new aircraft and just rely on support and leasing of ATR aircraft, and maybe get into component manufacturing for Airbus or others?

Léonard: We don't manufacture parts. Airbus is our subcontractor. They manufacture the wing for us. It's absolutely out of question to do the opposite. We don't see a reason for today to reduce our role to that. We have a market, and we now have a structure that allows us to be profitable after a lower level of activity. We see a relatively slow but positive trend and we believe that we can be profitable, provided we manage the Dollar – Euro issue.

FLUG REVUE: How important do you consider the asset management part of the business for ATR, and what is the percentage on total turnover?

Léonard: It is one of our three businesses next to production of new aircraft and services. It is an important part with potential: We delivered 39 aircraft last year for asset management. We will probably deliver more than that this year. The percentage of turnover varies from year to year. In a normal year like 2002, about half of the turnover comes from new aircraft, the rest is divided half and half between service and asset management. 2003 was a little bit different because of the downturn in regional aviation

FLUG REVUE: How could the next generation of regional aircraft look like? Will it be turboprops or jets?

Léonard: My belief is that today the current generation consists on one side the new generation turboprop ATR 42/72–500 and the Dash 8Q and the new family of jets form Bombardier and Embraer on the other side. A generation of aircraft in aviation lasts many years. I do not see a definitely new generation immediately. European aviation today is focused on the A380 and A400M. Once these aircraft are developed maybe there will be new technologies available which will be useful for regional aviation. They could allow considering the development of new projects. I do not see that either for jets or turboprops in the short term. We believe that we have the best product for short distances. We have no interest to develop something new today. In terms of jets there are solutions on the market. I think there is no interest of developing a new product.

FLUG REVUE: How long could the present ATR 42 and 72 series be produced accordingly?

Léonard: As long as there is no newcomer on this market. Which means that as long as there is nobody developing a new project specifically dedicated to short distances.

FLUG REVUE: What are ATR's plans for future aircraft?

Léonard: We have no definite study. We have a good product well adapted to the market. We have no interest of developing our own competitor. And we improve our product with the new cabin for example Each time a new avionic tool comes to the market we put it into the aircraft. And it is our interest to take advantage of what we have and to get the best out of it.

FLUG REVUE: At what point of time could a new regional aircraft enter the market?

Léonard: In terms of short distances the big questions mark is what will be the engine of the future. I see no project adapted to short distances today. For some reasons all the engine manufacturers focus on engines for long-distance regional aircraft. There is nothing for short distances.

FLUG REVUE: Will there ever be an ATR jet?

Léonard: Today it is not our strategy to do that. And the main reason for that is that there are jet aircraft on the market today. There is no technology that would allow to do something drastically better.

FLUG REVUE: Seeing the growth in the 70 seat jet segment, do you wish to have proceeded with the RJ project AIR 70 at the end of the 90s ?

Léonard: That is an old story I think. Several years ago it would have been a good move to do it. That is my belief. But it is the past.
Patrick Hoeveler asked the questions.

From page 21 of FLUG REVUE 6/2004

Last updated 7 May 2004

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